Jim Pastor from Rockview Milk in Santa Ana sits among the stacks of plastic milk crates stored in the loading dock area of the business. Pastor says the crates cost $3 each and when stolen and chopped up for plastic recycling are worth $2 each. MICHAEL GOULDING, THE ORANGE COUNTY REGISTER

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Security cameras were installed in the loading docks at the Rockview Milk in Santa Ana. MICHAEL GOULDING, THE ORANGE COUNTY REGISTER

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Jim Pastor from Rockview Milk in Santa Ana says that at one time the whole dock was filled with yellow crates but now he says he's lucky to see five yellow crates a month. MICHAEL GOULDING, THE ORANGE COUNTY REGISTER

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Jim Pastor from Rockview Milk in Santa Ana shows a big stack of plastic milk crates stored in the loading dock area of the business. Pastor says the crates cost $3 .50 each and when stolen and chopped up for plastic recycling are worth $2 each.SAM GANGWER, ORANGE COUNTY REGISTER

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Elias Garcia with Rockview Milk in Santa Ana goes through the next day's orders in a storage container at the dairy's Santa Ana facility Monday. MICHAEL GOULDING, THE ORANGE COUNTY REGISTER

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Jim Pastor from Rockview Milk in Santa Ana sits among the stacks of plastic milk crates stored in the loading dock area of the business. Pastor says the crates cost $3 each and when stolen and chopped up for plastic recycling are worth $2 each. MICHAEL GOULDING, THE ORANGE COUNTY REGISTER

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Elias Garcia with Rockview Milk in Santa Ana checks the next day's orders in a storage container at the dairy's Santa Ana facility Monday. MICHAEL GOULDING, THE ORANGE COUNTY REGISTER

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A notice pressed into the plastic on milk crates warns of a $1,500 fine for theft or destruction of the crate. SAM GANGWER, ORANGE COUNTY REGISTER

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A warning is used on some of the milk crates at Rock View Milk in Santa Ana. SAM GANGWER, ORANGE COUNTY REGISTER

Stealing plastic

California has several laws targeting the theft of commercial plastics.

Assembly Bill 1583 – Prohibits recyclers from taking merchandise shipping materials from anyone who cannot prove that they own them.

Penal Code 565 – It is a misdemeanor to possess an amount of dairy crates valued at less than $950 when a company's name is on them and you do not own them. Punishable by a fine up to $1,000.

Penal Code 566 – Illegally possessing an amount of crates valued more than $950 is a felony that is can result in jail time or a fine up to $1,500.

Instead of stealing milk crates just for convenient storage, thieves are turning them into cash.

People are stealing and shredding plastic shipping containers from local businesses for profit in what investigators believe to be a $5 million annual operation.

Businesses, including grocery stores and restaurants, receive products in plastic containers, usually in the form of crates and pallets, and often leave the materials outside, where they can easily be stolen, said Sgt. Nabeel Mitry, the head of the Los Angeles Sheriff's Department Industrial Plastic Theft Task Force. Mitry said these thefts have become more common as thieves target accessible neighborhood items such as copper wire. The big difference, he says, is that plastics are much easier to profit from.

"These plastics are easier to steal under law enforcement's nose," Mitry said. "The average street cop could see it and not really realize it's a crime."

The plastics task force, which is funded by the City of Industry, has exposed at least 50 underground recycling operations since forming in September 2011. On Jan. 2, the task force recovered $115,000 of company-owned plastics from El Monte and Lynwood.

Locally, the task force raided a recycling operation at SoCal Plastics in Anaheim in July of last year, which led to the arrest of four people, including owner Hector Palacios, and the recovery of $450,000 of stolen plastics, Mitry said.

"They take the plastic and grind it up in a machine that looks like a wood chipper," Mitry said. "It is then bagged and sold as raw plastic material."

Investigators said that the bags are usually filled with about 2,000 pounds of plastic that is sold for a variable price depending on quality, type and purity.

The average price of a plastic shipping pallet is $75, and local dairy Rockview Farms pays around $3.50 to replace its stolen milk crates.

Rockview Farms has a location in Santa Ana that distributes milk to households and businesses in Orange County.

"The scavengers who steal the plastic only make, let's say, $3 per pallet because the grinder has to make money and the seller has to make money," Mitry said. "But if you steal 300, 400, 500 of those a day, you can make a profit."

Aware of problem

Bill Kroese, the director of safety and loss prevention at Rockview, said the company spent $1.4 million replacing milk crates in 2012.

"Customers leave the crates lying around," he said. "We're now offering incentives to customers who return more crates than they previously have."

Dave Heylen, spokesman for the California Grocers Association, said grocery chains are aware of the thefts and that more have begun securing the plastic containers inside so that food companies do not have to spend extra money replacing the plastic products.

"They understand that people in the grocery business have a razor-thin profit margin," he said. "I think the stores realize that distributors can't afford to lose" the plastics.

Mitry said the toughest part of an investigation is finding out who is buying the materials, because the plastic becomes untraceable after it is chopped up.

"We believe they are shipping it overseas and to places like Mexico," Mitry said. "The companies that originally owned the plastic end up having to buy it back to make new materials."

The plastic-theft task force investigates local plastic businesses like SoCal Plastics and Broadway Plastics, another location raided in the Jan. 2 bust.

"Oftentimes, (the business) is a cover-up," Mitry said. "Ninety percent of what they're doing is illegal."

60 arrests

So far, the task force has recovered about $7 million in plastics and has made 60 arrests for possession of stolen property, Mitry said.

Kroese said the task force returns plastic materials to companies, including Rockview Farms, if the products haven't been shredded.

"A lot of times, the crates are already ground up and it's too hard to tell which plastic is ours since our containers are the same color as Pepsi's," he said. "We're a lot smaller than some other big companies, so the cost of the crates comes right out of the owner's pocket."

The task force is the only program of its kind in the United States, Mitry said.

"They've been really helpful in returning our products," Kroese said. "We've been called about a half-dozen times to come get them."

California recently passed Assembly Bill 1583, which prohibits recyclers from accepting pallets to be redeemed for cash, but the problem of the underground industry remains.

Mitry believes the thefts will continue to be a problem because of the easy access to the material and the inability to keep an accurate count of all the plastic containers.

"It could be possible, but I believe we are far from that," Mitry said.

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